The group maintains internal controls and systems designed to provide reasonable assurance as to the integrity and reliability of the financial statements and to adequately safeguard, verify and maintain accountability for its assets. Such controls and systems are based on established policies and procedures. These are implemented by trained personnel and are monitored, dependent upon the particular circumstances, through:
- the use by management of internal accounting control checklists;
- the establishment of defalcation reporting procedures;
- the functions of the internal audit department; and
- the use of suitably qualified external assurance services to conduct independent quality reviews of the scope and approach of the group’s internal audit function.
There are comprehensive management reporting disciplines in place, which include the preparation of annual budgets by all operating and service units. The board reviews and approves individual and consolidated operational budgets. Management structures report monthly results and the financial status of operating units against approved budgets and prior years. The board reviews profit projections and cash flow forecasts, which are updated quarterly. Nothing has come to the attention of the directors to indicate any material breakdown in the functioning of internal controls and systems during the year under review.
The directors are responsible for the preparation and integrity of the annual financial statements and other information presented in the integrated annual report in a manner that fairly presents the state of affairs and results of the operations of the company and the group. The annual financial statements are prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the International Accounting Standards Board’s IAS 34: Interim Financial Reporting, the requirements of the Companies Act, No 71 of South Africa and the JSE Listings Requirements. The external auditors are responsible for carrying out an independent examination of the financial statements in accordance with International Standards on Auditing and reporting their findings thereon. In the opinion of the directors, the group has adequate resources to continue in operational existence for the foreseeable future. Financial gearing, cash flows and access to equity and loan capital are considered to be sufficient to fund existing activities and any chosen opportunities to expand the business cost-effectively. For this reason, the directors continue to adopt the going-concern basis in preparing the annual financial statements.
Conflicts Of Interest
Directors are obliged to disclose their shareholdings, additional directorships and any potential conflicts of interest, direct or indirect, that may arise, at every board meeting. These are appropriately managed and recorded in a register and in the minutes of the meeting. The group has a formal policy in place governing the dissemination of price-sensitive information. Only the chairman and the managing director may discuss matters which may involve price-sensitive information with third parties, within appropriately regulated confidentiality undertakings. Directors and officers of the group who have access to unpublished and price-sensitive information are prohibited from dealing in shares of the company during restricted periods, covering those immediately prior to the announcement of the interim and final results, whilst the company is under a cautionary announcement, as well as at any other time the directors may deem it necessary. Directors and the company secretary may not deal in the company’s shares without advising the chairman in advance and after receiving clearance from him. Officers of the company may not deal in the company’s shares without advising the managing director in advance and after receiving clearance from him. Share dealings by directors of the company are notified to the JSE for publication via the Stock Exchange News Services (SENS).